RENEWABLE-ENERGY STOCKS HAD a banner year in 2007, but now some clouds are rolling in.

The industry is facing a loss of $7 billion in subsidies, after Congress failed to include renewable-energy production and investment tax credits in the energy bill that it passed in December. Credits from the 2005 energy bill are set to expire at the end of this year, and a number of trade associations are lobbying to get them extended.

"We're seeing an impact already" on new projects, says Gregory Wetstone, senior director of governmental and public affairs at the American Wind Energy Association. "Things are going to get very dire" toward the end of the first quarter if nothing is done soon, he says. The industry received $9 billion in new investment in '07.

Rhone Resch, president of the Solar Energy Industries Association, anticipates a big drop in new business by the second quarter if the credits aren't extended.

Both groups would like to have the credits attached to legislation like the economic-stimulus package now being discussed, and Wetstone says he's "confident" the extension will be renewed. Matthew Beck, a spokesman for the House Ways and Means committee, which handles tax matters, says that it's too early to handicap the chances for legislation, but "we're very interested to find ways we can encourage renewable energy."

In 2007, the
WilderHill Clean Energy ETF
(ticker: NEX), was up 49% as oil prices jumped -- but it's already off 17% this year, nearly double the broad market's loss.

Coming U.S. Auctions

Day

Yields (%)

When

Last

Issued*

Auction

M

$21.0 bil

3-month

2.790

3.080

$19.0 bil

6-month

2.770

2.950

* As of Friday afternoon.

One Day This Week

China is expected to release economic growth for the fourth quarter and all of 2007, giving a read on whether the world's fastest growing economy is slowing down.

Monday 21

U.S. markets are closed in observance of Martin Luther King Day.

Tuesday 22

The Senate Finance Committee holds a hearing on the economy and the fiscal stimulus plan.

The two-day meeting of the Bank of Japan ends. The central bank, though maintaining a long-term aim of increasing rates, is expected to hold them steady at 0.5%.

The Bank of Canada is seen cutting interest rates by another quarter of a percentage point, to 4%, on concerns about the effect of the U.S. economy's deterioration and global credit-market problems on Canada, a survey by Dow Jones Newswires said.

Nintendo posts third-quarter earnings, including holiday sales of its Wii and DS game consoles. Unlike other holiday sales, the videogame sector had a spectacular month in December, with the Nintendo Wii leading console sales at 1.35 million units, according to NPD Group.

LG Electronics reports fourth-quarter results.

RiskMetrics Group, a financial risk manager, is expected to sell 14 million shares to the public at prices ranging from $17 to $19 a share, under the ticker RMG.